The scenes of fewer customers and closed jewellery stores on Wednesday were in stark contrast to the brisk business witnessed last night, with scores of people buying gold and other ornaments soon after the announcement.

After a late night surge in the business, sale of jewelleries and gold in Gujarat dropped nearly 70 per cent on Wednesday due to liquidity crunch following the demonetisation of Rs 500 and Rs 1,000 notes. Most branded and non-branded jewellery outlets across major cities like Ahmedabad, Rajkot, Vadodara and Surat remained shut, a day after Prime Minister Narendra Modi Tuesday night announced the decision to scrap the two bigger currency notes.

The scenes of fewer customers and closed jewellery stores on Wednesday were in stark contrast to the brisk business witnessed last night, with scores of people buying gold and other ornaments soon after the announcement. Several branded stores remained open till midnight in Ahmedabad.

However, most of these outlets remained closed for operations on Wednesday, complaining about liquidity crunch.

“Close to 70 per cent of the business has been hampered as the jewellery business cannot function on notes of smaller denomination. Most jewellers did not do any transaction as even the banks were closed and there was no way they could exchange Rs 500 and Rs 1,000 notes. Branded retail jewellery shops did brisk business on Tuesday night in Ahmedabad before the ban came into force… Bullion traders did not do much business as no one had anticipated this announcement,” said Shanti Patel, president of Gem and Jewellery Trade Council of India (GJTCI) & president of Gujarat Chapter of India Bullion & Jewellers Association.

Harit Zaveri, director of RBZ Jewellers Pvt Ltd, located in Ahmedabad, said: “Today, jewellers are in the worst scenario as we are unable to conduct business transactions. And considering that the marriage season has just kicked off, the buying has been zero. Most transactions that took place are backdated.”

Manekchowk in Ahmedabad, also known as “jewellers street”, experienced a “mini shutdown” following the government’s announcement as most jewellers chose not to conduct any transaction with the two banned currencies.

“Close to 350 jewellers of gold and silver jewellery on Manekchowk have suspended work as no one is taking the banned currency notes and are only accepting notes of smaller denominations. Bullion prices also spiked Tuesday night with many retailers selling gold at Rs 32,000-33,000 per 10 gram as customers rushed to buy gold to convert their black money. However, today all jewellers are only accepting Rs 100 currency notes, so bullion buying is also down,” said Pathik Shah, a prominent jeweller here.